Getting up and running with a new project can be an exciting and nerve-wracking experience. But before the project starts, it is important to get agreement and alignment on the basis for the project, and the authority that is being handed to the project manager.
This is usually achieved through the creation of two artifacts: A business case, and a project charter. The business case is a value proposition for the project, and will usually contain background context, options that were considered, and expected benefits (tangible and intangible).
The Project Charter is a document that formally authorizes the existence of the project, and provides the Project manager with the authority to apply resources to project activities. In theory, the project charter is provided to the project manager by the project initiator or sponsor. More often though, the Project Charter is the first thing a Project Manager is tasked with producing.
The charter should contain information about the project, that allows the sponsor and the project manager to reach a common understanding of what the project is for, what resources are to be assigned, and what objectives are to be achieved. The charter should also detail any constraints (such as immovable deadlines), and known risks.
The sections in our Project Charter Template
Our charter document comprises the following sections:
- Executive Summary
- Project Purpose
- Why do we need this project?
- Business Objectives / OKRs
- About the Project
- Project Objectives and critical success factors
- Summary Milestones
- Summary Budget
- Risks and Assumptions
- Team and Organization
- Approvals / Authorization to proceed
When to create a project management charter
The project management charter is created pre life cycle, prior to the formal start of the project. It is the authorization of the project charter that signals the start of the project. Once the charter has been authorized, the project can formally begin. The project team and resources will be secured, project structures will be established and work will begin on decomposing the high-level data in the charter into plans, wireframes, and detailed requirements.
The project charter should be reviewed regularly throughout a project to ensure the project remains within the constraints defined, and within the authority delegated to the project manager. It is common practice for formal reviews to take place during project closure to determine if the deliverables have been achieved – the savvy project manager will not wait until that point to find out!
How the PMO should use Project Charters
Project charters are important strategy artifacts. Different types of PMO will use them in different ways. They are important for PMO teams that operate within projects in a supporting capacity to the project manager, and they are important for Enterprise PMOs providing oversight on behalf of the business.
Project Support PMO functions can use the Project Charter as a basis for a number of Project Artifacts. Assumptions and Risks from the charter should be transferred to logs, and the Project Manager should be supported to develop risk management plans. Milestone plans will typically be expanded during the planning phase, and the PMO will take care to ensure that decisions made in planning, can be mapped back to the charter. Finally, the PMO should keep a record of projects scope items that are delivered, so that these can be fully accounted for during project closure.
Crucially, the supporting PMO will monitor actual investment and delivery on the project against the authority provided by the charter document. The PMO can support the project by alerting the project manager to issues or situations that may cause the project to veer away from the charter, and can provide support with realignment.
For the enterprise PMO, the charter is used as a basis for assessing the ongoing success of the project. They may seek regular assurance that the project is continuing in line with the charter, and will remain vigilant for factors within the business or in other projects, that may have an impact on project success.
Free Project Charter Template
Our free Project Charter template is in Microsoft Word format, and is compatible with Google Docs. Our logos and branding can be easily removed and replaced with your own.
Depending on the needs of your organization, you may wish to add or remove sections to suit your needs. As long as the sponsor, project manager and governance bodies such as the PMO agree on the content, then you are encouraged to tailor the document to your needs. Charters vary from organization to organization and the best ones are tailored to the environment in which the project will operate. Some organizations will refer to OKRs, others will have a goal statement. Some will include MS Project plans, others will stick with high-level milestones. None of these are inherently right or wrong – as long as your organization align on what is right for you, and how much information needs to be captured to give the project manager the clear authority that they need, and for the sponsor to feel confident that the project has a clear remit.
Project Charter as a communications tool
Whilst the charter document serves an important formal function for approving the project, it is also a valuable communication tool for those who undertake the project. Because the document provides background, context, projects scope and spending authority, it can be a valuable artifact to help people who are joining the project managers team. It can serve as a guide to the project, explaining key elements at a high level, and helping everyone involved in the project understand the success criteria.